CD ripping for the lower end.

Free XLD on your Mac is the way to go. Rip them to AIFF if you want to use with iTunes(which I hate), Audirvana+, Amarra or anything else. It supports tags, art etc. and is lossless. With AIFF you can download same files to your iphone for portable or car listening. FLAC is a nuisance in appleland, as they don't support it. You can convert FLAC to AIFF with many free or cheap software programs.
On mac, it's a worthwhile small investment to buy the Yate app to manage/edit your tags. 
Your 2nd step is on the right track. Just skip the 1st step. iTunes sux.
If you rip to AIFF or FLAC you will also be able to eventually copy the files to a true NAS if you decide to upgrade and then still use the mac for accessing the server, ripping to the server on your network etc. 
FYI, one of the worst things about building a library in iTunes is that art is embedded on the songs in a way that when you copy the files elsewhere, you lose all the art. Rip to AIFF, save cover.jpg to each album's folder(XLD does this automatically). Then you will have a portable, extractable library including art. Cheers,
Spencer

One of the main challenges to overcome with digital playback is noise (many types including electrical, RFI, EMI, etc.) coming from the digital player (i.e. computer or network steamer/player). This is especially an issue with older devices outputting the digital music to the dac via USB. In the last couple of years manufacturers have greatly improved USB outputs in high end audio purpose built players. OTOH, macs & PCs have USB outputs not optimized for audio sound quality. That's why so many approaches have been utilized to attack the problem including: dual-headed USB cables that separate power from signal)
filter boxes that disengage the power leg of a single USB cable
decrapifiers
upgraded linear power supplies
low power linux players running few proceses

For all these reasons stepping up in SQ at reasonable cost for most of those in the know involves going from a full purpose computer running high power and an O/S running tons of processes that don't involve audio to a single purpose built low power player, regardless of whether the storage is local or in another room and connected via network(NAS).

When you make that change you'll probably change software too, although you might not. Whatever choices you make now should position you to make those changes without having to convert all your files or edit all your metadata. One example is that albumartist is a key metatag field in many software programs and often ripping won't populate it. Do yourself a huge favor and edit your metadata when you rip each disc and populate that field with artist name or soundtrack title or whatever else might be the thing you most want to look up your disc by. Cheers,
Spencer